QuickBooks 1099 TimeIt's QuickBooks 1099 time and you need to prepare your business’s Form 1099s which is due February 28. Hopefully you haven't waited for the last moment to use QuickBooks 1099 module, which is typically the case for most small businesses. Although this blog post is designed for users of QuickBooks Online, the QuickBooks 1099 tips may be used for other versions of QuickBooks and other small business accounting software. This article will not discuss what payment qualifies as a 1099 recipient or how to print the form 1099. It discusses a way to check the information and provides some planning tips for next year.
It's important to make sure that the information appearing in each form 1099 is accurate and represents the cash transactions that occurred for the year that has just ended. The furthest thing from your mind is to have a vendor or stockholder or any person who received the form 1099 to call you up to complain that the QuickBooks 1099 they just received is incorrect. Not only is that embarrassing, it’s a waste of time because now you have to amend the QuickBooks 1099 and probably pay fees to have the QuickBooks 1099 amended.
Verify the information being used to file the QuickBooks 1099 with the IRS
It’s important to make sure the QuickBooks 1099 information is correct before you send it out. You can perform this check by reviewing the information that is in the form 1099. Fortunately, QuickBooks 1099 makes this easy, by allowing you to drill down for each 1099 recipient and you will see the detail payments for each 1099 recipient before its transmitted to the payee. It's important that the information appearing in the form 1099 is an actual cash payment made during the preceding year. The information in the Form 1099 should not include accounts payable or anything else. You can verify the QuickBooks 1099 information in two ways. The first is look at the QuickBooks 1099 detail transactions comprising the 1099 summary amount directly from a 1099 report, and the second, is to look at the accounts payable detail as of December 31 to make sure that the payables are not included in the amounts being reported in the form 1099. From within QuickBooks Online you do this by drilling down on the amount shown in the summary QuickBooks 1099 form.
You can watch a very short video explaining the drill down procedure or skip the video and look at these screenshots. Here is the video
The most important tip, is to plan to gather all of the payee information such as correct name, address and Taxpayer ID number in advance of preparing the form 1099s and more importantly to carefully read the IRS Instructions for Form 1099 –MISC and make sure that you are reporting the correct types of payees . The way you can do this, is to set up a policy and procedure for the book keeper to prepare a simple one-page new vendor setup form, that has the vendor’s name, address, email,website,tax payer ID number,account to be coded and budgeted amount for the year.The new vendor set up form should be approved by the owner . This form ensures that your bookkeeper is obtaining the vendor and the QuickBooks 1099 information timely and more importantly that only vendors known to the owner are being properly set up and paid.
If you are like most users, it’s hard to believe that you cannot prepare the Form 1096 from QuickBooks Online. We are waiting for Intuit to make that change to their QuickBooks 1099 drop down.